Trusteeship

Question 1

Boardman v Phipps

Answer 1

court has inherent jurisdiction to award remuneration

Question 2

Keech v Sandford

Answer 2

husband was legal owner of lease, husband and wife were beneficial owners under a trust for sale, husband used his legal title to buy out the freehold reversion and sold the property, constructive trust arose where W was entitled to a share of the proceeds from sale, when H purchased the reversion, he held half the fee simple interest for her benefit

Question 3

Re Macadam

Answer 3

no defence to making a profit through trustees position unless he made the profits ‘with the knowledge and asset of the other persons’

Question 4

Holder v Holder

Answer 4

son appointed executor of will but renounced position, purchased estate, later another son sought to have it set aside on the basis of the self-dealing rule, held son never assumed executory role and made it clear at all times he intended to purchase thr property

Question 5

Tito v Waddel

Answer 5

purchase by T of the beneficial interest of any of the trustees is not voidable but can be set aside unless T can show he hasn’t taken advantage of his position, he made a full disclosure to B, the transaction was fair and honest

Question 6

Re Brogden

Answer 6

failing to institute & prosecute legal proceedings to recover debt owed to the trust may constitute a breach of duty to safeguard assets of the trust, however there is no such breach if T believed that such a proceeding would fail

Question 7

Keane (duty to invest)

Answer 7

it is T’s duty to ensure that the trust property is invested in the manner which will prove most advantageous to all the beneficiaries

Question 8

Re Harari Settlement Trusts

Answer 8

in exercising ordinary prudence in making investments, T is to invest in any investment which he honestly thinks is desirable

Question 9

Barett v Barclay’s Bank

Answer 9

trustees made 2 unauthorised investments one of which made a profit, court allowed the profit of one to cover the loss of the other as they were in the same course of wrongful conduct - highlighted there must be a very close connection for this to occur

Question 10

Knott v Cottee

Answer 10

trust funds were to be used for stocks and bonds however T used them for foreign investments, T held liable for losses which resulted

Question 11

Biehler

Answer 11

even if T does not stray outside the ambit of authorised investments, he must observe certain standards when carrying out duties

Question 12

Learoyd v Whitely

Answer 12

T must take the care an ordinary prudent man of business would take if he were making investments for the benefit of those for whom he felt morally bound to provide

Question 13

Bartlett v Barclays Bank

Answer 13

Brightman J held a T must conduct business as an ordinary man would his own affairs, this does not mean T is bound to avoid all risk , the court won’t fix liability on T who has committed no more than an error of judgement which no businessman can expect to be immune - emphasised a higher duty of care is expected in cases with professional T

Question 14

Nestle v National Westminster

Answer 14

trust fund gave D bank (T) wide powers to invest, B, when she became entitled to the trust claimed it should have been worth more but was not due to T’s failure to invest, held the essence of the banks duty was to act as an ordinary prudent man would his own affairs, unless it failed to do so, it was not in breach of the trust, emphasised the point that T will not automatically incur liability due to a mere error of judgement

Question 15

Keane

Answer 15

notes it is remarkable that professional T who have breached their duties escape liability despite there being expert evidence that the investments failed to maintain their value in real terms

Question 16

Stacey v Branch

Answer 16

P argued that D(T) breached his duty by leaving the trust property in care of caretaker rather than renting it out despite being given ‘full power to deal with the property in his absolute discretion as he shall think fit”, argument was rejected, found T acted bona fide, held duty of T is to act honestly, use as much diligence as a reasonably cautious man and avoid any investments that are attended with hazard

Question 17

Keogan, Mee & Wylie

Answer 17

criticised S v B as unduly generous to T

Question 18

Re Hastings - Bass

Answer 18

T’s exercise of discretionary powers may be set aside where it is clear that he would not have acted as he did a) had he not taken into account considerations which he should not have taken into account, or b) had he not failed to take in account consideration which he ought to have taken into account

Question 19

Pitt v Holt

Answer 19

Lloyd LJ restated the rule that T’s duty to take relevant matters into account is a fiduciary duty, so an act done as a result of a breach of that duty is voidable

Question 20

Abacus Trust v Barr

Answer 20

the principle does not require that T’s mistake is fundamental, all that is required is that the unconsidered relevant consideration would or might have affected T’s decision

Question 21

Sieff v Fox

Answer 21

held court could set aside an exercise of T discretion where the effect was different from that intended and T would not have acted as they did if they had not failed to take account of relevant circs or took account of irrelevant circs

Question 22

Lord Neuberger

Answer 22

extra-judicial comment, the rule was a get out of jail free card for T’s who had erred

Question 23

Boliden v Tara Mines

Answer 23

Finlay Geoghegan J held it unnecessary to choose between but preferred the ‘would’ formula

Question 24

Pitt v Holt

Answer 24

Eng SC restricted the principle to apply where there has been a breach of trust/fiduciary duty only

Question 25

Greene v Coady

Answer 25

Charleton J, it is not for the court to be cleverer or better informed than T, it must avoid temptation to listen to the evidence and to make its own conclusion as to what should have been done, the hot seat of T is where the court should place itself, reaffirmed the rule in HB

Question 26

Arnott v Arnott

Answer 26

held that generally speaking courts inherent jurisdiction to remove T would be exercised where T acts dishonestly or incompetently or wilfully obstruct the object of the trust

Question 27

Moore v McGlynn

Answer 27

D was discharged from further performance of duties as T where he set up a rival business in competition to that of which he was T for the benefit of the family of his deceased brother, ‘his new position disqualifies him from remaining any longer a T, he should not have continued in a position where his duties and self-interests conflict